Natural Gas Technical Analysis: Price Continues to Rise

Our expectations indicate more ascent for natural gas during its upcoming trading.

Spot natural gas prices (CFDS ON NATURAL GAS) rose during the recent trading at the intraday levels, to achieve new daily gains by 0.23%. It settled at the price of $ 5.718 per million British thermal units, thus going on the right track to achieve gains for the fourth day in a row, after it rose in trading on Friday by 1.73%, recording gains for the third consecutive week and the sixth out of seven weeks, by 2.66%.

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NYMEX natural gas futures continued to consolidate gains amid the ongoing war in Ukraine following the Russian invasion in late February. Continued demand for US supplies combined with weather-driven demand and a belated return to normal production sent the Nymex contract for May to $5,720 by Friday, an increase of 18.2 cents from Monday’s close.

On the other hand, cold weather returned to the northern US, and buyers were forced to turn to the spot market to buy gas, as overnight temperatures fell below zero in key demand areas.

Demand for liquefied natural gas (LNG) continues to be strong, with US plants operating near capacity, in an effort to help Europe meet demand and refill its stocks before next winter. Meanwhile, US inventories are lower than usual after cold weather became more widespread and sustainable starting in January, draining inventories amid increasing heating loads.

Meanwhile, the latest storage data from the US Energy Information Administration (EIA) showed that inventories rose by 26 billion cubic feet during the week ending March 25 to 1415 billion cubic feet.

Technically, the price is trying in its recent trading on the intraday levels to breach the important resistance level 5.710, amid the dominance of the main bullish trend in the medium term along a slope line, as shown in the attached chart for a (daily) period. It is supported by its continuous trading above its simple moving average for the previous 50 days. In addition, we notice the influx of positive signals on the RSI indicators, despite reaching overbought areas.

Therefore, our expectations indicate more ascent for natural gas during its upcoming trading, especially in the event that it breaches the resistance 5.710, and then targets the pivotal resistance level 6.412.